Pace v. Constellation Brands, Inc.

Filing
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MEMORANDUM ADOPTING REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE 34 . Defendants' Application for Temporary Restraining Order and Preliminary Injunction (Dkt. #18) is GRANTED. Plaintiff and his officers, agents, servants, emplo yees, attorneys, and Sedo.com, LLC are prohibited from selling, leasing, and/or otherwise transferring the domain name "rufino.com" pending resolution of this action, effective immediately. This Preliminary Injunction shall remain in full effect for the pendency of this matter or until further order of the Court. Signed by District Judge Amos L. Mazzant, III on 2/13/2018. (rpc, )

United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
STANLEY PACE,
Plaintiff,
v.
CONSTELLATION BRANDS, INC., and
RUFFINO S.R.L.,
Defendants.
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CIVIL ACTION NO. 4:17-CV-518
JUDGE MAZZANT/JUDGE JOHNSON
MEMORANDUM ADOPTING REPORT AND
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
Came on for consideration the report of the United States Magistrate Judge in this action,
this matter having been heretofore referred to the United States Magistrate Judge pursuant to 28
U.S.C. § 636. On December 13, 2017, the report of the Magistrate Judge (the “Report”) was
entered containing proposed findings of fact and recommendations (see Dkt. #34) that Defendants
Constellation Brands, Inc. and Ruffino S.r.L.’s Application for Temporary Restraining Order and
Preliminary Injunction (the “Application”) (Dkt. #18) be GRANTED.
On December 28, 2017, Plaintiff filed objections to the Report (see Dkt. #36); Defendants
filed a response (see Dkt. #37). The Court has made a de novo review of the objections and is of
the opinion that the findings and conclusions of the Magistrate Judge are correct and the objections
are without merit as to the ultimate findings of the Magistrate Judge. The Court hereby adopts the
findings and conclusions of the Magistrate Judge as the findings and conclusions of the Court.
Plaintiff first objects that the Magistrate Judge erred by not analyzing whether Plaintiff has
a “fair use” defense under the Anticybersquatting Consumer Protection Act (“ACPA”). See Dkt.
#36 at 2. To support his objection, Plaintiff relies on one Fifth Circuit case, Southern Co. v.
Dauben, Inc., 324 F. App’x 309 (5th Cir. 2009). In Dauben, the Fifth Circuit vacated the district
court’s grant of a preliminary injunction because, inter alia, the district court omitted consideration
of the ACPA’s “fair use” provision. See Dauben, 324 F. App’x at 316-17. Upon review, the Court
does not consider Dauben as binding precedent for several reasons. First in Dauben, the Fifth
Circuit expressly stated that “[p]ursuant to 5TH CIR. R. 475” the opinion “should not be published
and is not precedent. . . .” See id. at 310. Second, Dauben found an abuse of discretion in granting
a preliminary injunction because the district court omitted “any consideration” of the ACPA fair
use provision; this was not the case in this matter. See id. at 316-17. At the December 7, 2017,
hearing regarding the Application, the Magistrate Judge stated on the record that she did not find
Plaintiff’s arguments regarding “fair use” persuasive. See generally Dkt. #33. Specifically, the
Magistrate Judge stated there was sufficient evidence to show that the “rufino.com” domain name
was being used by Plaintiff in bad faith, including evidence that Plaintiff: has repeatedly infringed
on the marks of large and well-known companies which were ultimately transferred to the rightful
owners; placed specific ads relating to the wine industry on the site in hopes of redirecting internet
traffic; and purchased the domain name for $843, yet has attempted to “sell” it to Defendants for
a significantly higher price. See id.; see also Dkt. #34 at 3-4. Upon review of the record, therefore,
the Magistrate Judge did consider Plaintiff’s “fair use” defense, and ultimately found the argument
not persuasive. Thus, the Court finds no error in the Magistrate Judge’s conclusion, and Plaintiff’s
objection is overruled.
Plaintiff also objects that the Magistrate Judge did not make any express findings of fact
or conclusions of law supporting the preliminary injunction. See Dkt. #36 at 3. In support, Plaintiff
states that the Magistrate Judge “merely repeats what was alleged by Defendants.” See id.
Plaintiff’s objection is meritless. In her analysis, the Magistrate Judge analyzed factual allegations
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and made ultimate legal determinations for each of the preliminary injunction factors as outlined
by the Fifth Circuit. See Dkt. #34 at 4-6. Accordingly, the Court finds no error in the Magistrate
Judge’s Report, and Plaintiff’s objection is overruled.
Plaintiff further objects to the Magistrate Judge’s findings because they allegedly rely on
erroneous factual findings. See Dkt. #36 at 4-5. Plaintiff does not support this objection with any
information regarding actual erroneous factual findings; instead, Plaintiff states there was “little
evidence” for the Court to use and also “implications” of facts that were erroneous. See id.
Plaintiff’s objection is meritless because he does not present any erroneous factual findings.
Therefore, the Court finds no error in the Magistrate Judge’s factual findings, and Plaintiff’s
objection is overruled.
Plaintiff also generally objects that the Magistrate Judge’s Report applied the wrong
standards for a preliminary injunction and gave inappropriate deference to a National Arbitration
Forum (“NAF”) opinion. See Dkt. #36 at 5-6. After reviewing the Report, the Court finds that the
Magistrate Judge applied proper Fifth Circuit precedent in analyzing whether a preliminary
injunction should be granted. See Dkt. #34 at 3. Additionally, the Magistrate Judge properly noted
that the Court reviews any such NAF decision on a de novo basis and made her ultimate findings
on all of the arguments and presented findings; thus, there was no inappropriate deference to the
NAF decision. See id. at 3-4. Accordingly, the Court finds no error in the Magistrate Judge’s
conclusion, and Plaintiff’s objection is overruled.
Lastly, Plaintiff objects to the Magistrate Judge’s finding that Defendants would suffer
irreparable harm if a preliminary injunction was not granted. See Dkt. #36 at 6-7. Upon review,
the Court finds the Report included substantial legal and factual support for the Magistrate Judge’s
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finding of irreparable harm. See Dkt. #34 at 4-5. Thus, the Court finds no error in the Magistrate
Judge’s conclusion, and Plaintiff’s objection is overruled.
Based on the foregoing, Defendants’ Application for Temporary Restraining Order and
Preliminary Injunction (Dkt. #18) is GRANTED.
IT IS THEREFORE ORDERED that a Preliminary Injunction is hereby placed into
effect until further order of the Court, providing:
Plaintiff and his officers, agents, servants, employees, attorneys, and Sedo.com, LLC are
. prohibited from selling, leasing, and/or otherwise transferring the domain name “rufino.com”
pending resolution of this action, effective immediately.
This Preliminary Injunction shall remain in full effect for the pendency of this matter or
until further order of the Court.
IT IS SO ORDERED.
SIGNED this 13th day of February, 2018.
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AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE
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